competitiveness

In comments on January 28, House Ways and Means Committee Chairman Kevin Brady (R-TX) said that the European Commission’s latest efforts to implement recommendations in the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) project will make it even harder for U.S. companies to compete in the global marketplace. This is a serious concern for manufacturers and an issue the NAM has raised numerous times with the media, the administration and Capitol Hill. Read More

Yesterday’s Wall Street Journal op-ed by Douglas Holtz-Eakin at American Action Forum raises some of the same concerns we’ve been hearing from our members about the BEPS recommendations from the Organization for Economic Co-operation and Development aimed at curbing tax avoidance and international profit shifting.Read More

The current law governing the privacy of electronic communication and how law enforcement accesses it was written in 1986. That law, the Electronic Communications Privacy Act, or ECPA, will turn 30 years old next year. The House Judiciary Committee is holding a hearing tomorrow on the need to update that legislation to reflect the dramatic change technology has undergone since the age of dial-up modems and fax machines. Read More

Saturday night’s ABC News and Yahoo! News debate encompassed a variety of issues, the obstacles to growing our economy and creating jobs. Sen. Santorum highlighted the NAM’s cost study, which shows that it is 20 percent more expensive to do business in the United States. This figure excludes labor costs. The cost burden rose from a 2008 report which put it at 17.6 percent. The report indicates the increase is due to widening gaps in regards to corporate tax rates and employee benefits.

While we have emerged from the economic recession, we are still facing challenging times. Unemployment remains at 8.5 percent and employers frequently cite “uncertainty” as their reasons for not expanding. This in turn, lowers our competitive edge. These topics were also echoed during Sunday’s NBC News and Facebook debate.

Several other candidates, including Gov. Romney and Gov. Huntsman discussed the need to become more competitive and Speaker Gingrich reiterated his plan to lower the corporate tax rate.

Manufacturing needs to be at the forefront of our economic recovery and it is encouraging to see presidential hopefuls talk about the need for a “manufacturing renaissance.” The National Association of Manufacturers is hopeful that the candidates will continue to discuss their manufacturing plans during the upcoming South Carolina and Florida debates.

On Sunday the Chillicothe Gazette in Ohio ran an op-ed (“Manufacturing changes my family — and world — for the better“) from National Association of Manufacturers President and CEO Jay Timmons about what manufacturing has meant to his family and what the future holds for manufacturing in the United States.

Here is a brief excerpt from the op-ed:

During the Great Depression, my grandfather waited in line for six months for a job at the Mead paper mill. For proud Americans of my grandfather’s generation, a manufacturing job represented a promise of security, a better quality of life and a path to the middle class.

As the years passed, the growth of once-vibrant manufacturing cities slowed, in part because of the changing global economy and emerging competitors abroad. And although manufacturing means jobs — exceptionally good-paying jobs — policy-makers in our nation’s capital, Republican and Democrats alike, failed to respond.

So, as a result of Washington’s neglect and misguided policy choices, it is now 18 percent more expensive to manufacture a product in the United States than in any other country. That figure doesn’t include the cost of labor.

Now more than ever manufacturers need pro-growth policies from Washington that will enable them to create jobs and compete globally. This is why the NAM will contiue to advocate for the policies outlined in the Manufacturing Strategy for Jobs and a Competitive America to boost the competitiveness of manufacturers in the U.S.

Dyke Messinger, a member of the National Association of Manufacturers’ board of directors, testified this week before the House Committee on Education and the Workforce, a hearing, “State of the American Workforce.” Dyke is president and CEO of Power Curbers, Inc., a manufacturer of curbing machines.

The United States is the world’s largest manufacturing economy, producing
21 percent of global manufactured products. U.S. manufacturing alone makes up 11.2 percent of our nation’s GDP. More importantly, manufacturing supports an estimated 18.6 million jobs in the U.S. – about one in six private-sector jobs. To put this in context, this is about the equivalent of the entire populations of the five largest cities in the U.S.: New York City, Los Angeles, Chicago, Houston and Phoenix combined. Nearly 12 million Americans (or 9 percent of the workforce) are employed directly in manufacturing. Manufacturing jobs are high paying jobs, too. In 2009, the average U.S. manufacturing worker earned $74,447 annually, including pay and benefits – 22 percent more than the rest of the workforce.

But today’s manufacturers face many challenges to our global competitiveness and job creation efforts. Proposals that increase taxes and impose new regulations will make business in the United States less competitive. These proposals will stifle the already weak recovery and destroy manufacturers’ ability to create jobs.

As President Obama promotes his new emphasis on economic competitiveness and regulatory reason and in preparation for tonight’s State of the Union, reporters have been touching bases with the National Association of Manufacturers for comment. Those are core issues for manufacturers, after all.

[The] National Association of Manufacturers would like to see regulations come with an expiration date, according to its vice president of regulatory policy, Rosario Palmieri. “We believe that there is value in regulations having an end date, as technology changes, as the markets change, as products change,” he said. “Regulations put in place three or four decades ago might no longer be necessary or might be out of date.”

Aric Newhouse, a top lobbyist for the National Association of Manufacturers, says the White House has sent some “great signals,” in recent weeks, and he’ll be tuning into the State of the Union hoping to hear Obama build on them with more specific plans for taxes, trade, energy and regulatory policy. But he says the question will remain: “What actually happens over the next three, to six, to nine months? Do we see an aggressive growth agenda that will create jobs and turn this economy around?”

Indeed. Caution seems a reasonable position to take before a speech, especially when the President has been signaling a change in his Administration’s positions.

The report notes many indications that the United States’ competitive capacity is slipping, including the following:

In 2009, 51 percent of U.S. patents were awarded to non-U.S. companies.

China has replaced the U.S. as the world’s number one high-technology exporter and is now second in the world in publication of biomedical research articles.

Between 1996 and 1999, 157 new drugs were approved in the United States. In a corresponding period 10 years later, the number dropped to 74.

Almost one-third of U.S. manufacturing companies responding to a recent survey say they are suffering from some level of skills shortage.

In addition, in spite of occasional bright spots, the nation’s education system has shown little sign of improvement, particularly in math and science, the report says. According to the ACT College Readiness Report, 78 percent of U.S. high school graduates in 2008 did not meet readiness benchmark levels for one or more entry-level college courses in mathematics, science, reading, and English, the report notes. And the World Economic Forum ranks the U.S. 48th in the quality of its math and science education.

Campaign season will be full of slogans, position papers and one-shot proposals about reviving manufacturing, but we need more than political tactics. Instead, let’s seriously address what it actually takes to create jobs in the global economy. The key word here is “competitiveness.”

When the United States recovered from the last deep recession of the early 1980s, it did so without competition from a unified Europe, a manufacturing giant in China, or rising industrial powers in Brazil and India.

These competitors think strategically about manufacturing. So must we.

For years, Washington has tried to encourage industry with specific pieces of legislation, government initiatives and small fixes. These are tactics. A manufacturing strategy will take a comprehensive view of what’s needed for U.S. manufacturing to succeed in the face of global competition.

The piece builds on the NAM’s report released in June, the “Manufacturing Strategy for Jobs and a Competitive America,” available at www.nam.org/manufacturingstrategy.

Other contributors to the AJC’s feature are Michael Thurmond, Georgia’s labor commissioner, and Paul Garcia and Donna Hyland, respectively the chairs of the Metro Atlanta Chamber’s technology and bioscience leadership councils.